The company that hooked the nation on boutique coffee is preparing to make a strong move into the grocery aisle with its instant coffee, Via, and more as- yet-only-hinted-at products. What effect with mainstreaming more of its products have on the equity of the Starbucks brand?
In an interview with The Wall Street Journal, Starbucks chief executive Howard Schultz promised that "very significant consumer packaged goods" are in the pipeline and heading for your local grocery chain. I can only hope those products are tastier than the Via instant, which received very mixed reviews (I think it tastes like... instant coffee).
But does putting Starbucks products on the shelves of stores like Walmart and Kroger diminish the reputation of the company that made $5 lattes popular? Brand marketing expert Adam Hanft, CEO and founder of Hanft Projects, frequent contributor to Public Radio's "Marketplace" and The Huffington Post and co-author of the Dictionary of the Future, think it's not likely to harm the brand. In the public perception, he says, there has been a general blurring of the boundaries between different distribution channels. Thanks, in part, to the Internet we are not so prone to associate the brand of store in which we buy an item with the item itself.
However, Hanft believes the greater challenge for Starbucks will remain finding a way to realize higher margins from the Starbucks coffee shops. Having vacillated with food offerings and bumped up against price ceilings for its drinks, the company is looking for innovations -- a search that recently led to
its purchase of the its opening of a different shop concept, the 15th Avenue Coffee and Tea in Seattle.
With all of these moves, Starbucks will need to insure that its brand remain intact. That may prove difficult. Reuters reports that New Yorker Zeynep Inanli is suing the corporation for serving up dangerously hot brew. Remember the infamous 1994 McDonald's lawsuit when the plaintiff won a $2.86 million verdict? For years after, the first thing I thought of when I thought of McDonald's coffee was a scalded lap.
That's how easy brand identification can be corrupted. Fortunately, it appears that Starbucks brand is strong enough to take go a little downmarket.